Shadow Chancellor Rachel Reeves today turned the screw on the oil and gas industry by saying a Labour Government would extend the windfall tax.

Ms Reeves said a loophole being used by the energy companies would be closed and that the tax would be backdated to raise more than £13 billion.

Her commitment to higher taxes on energy company profits follow party leader Sir Keir Starmer’s pledge at the Davos summit that there would be no new investment in oil and gas under a Labour government.

In a speech to the Fabian Society, Ms Reeves said she would close the fossil fuel investment loophole and tax oil and gas profits at the same rate as Norway.

Ms Reeves said: “Over the last year, North Sea oil and gas profits have tripled. That cannot be right.

“So today, I can announce what a Labour government would do.

“We would hold to that most basic of principles: that those who have profited from the windfalls of war should shoulder their share of the cost, so ordinary people do not have to bear the brunt of a crisis that they did not cause.

“We will extend the windfall tax, closing the fossil fuel investment loophole and taxing oil and gas profits at the same rate as Norway.

“By backdating this from the start of 2022, when oil and gas giants were already making historically large profits, we can raise more than £13bn.”

She added: “A Labour government would pass those savings onto families immediately, to keep energy bills down this year.

“Our plan will save a typical household up to £500 on their energy bills from April, compared to the government’s plan,  by keeping the energy price guarantee at its current level of £2,500, rather than letting it rise to £3,000. 

“But let me be clear: this is a maximum. If wholesale prices fall further, the cap must come down too.”

She said Labour was determined to lead the country to a new clean climate economy.

“Labour will act to keep energy prices down for good,” she said. “That is why Labour has a plan to reach one hundred percent clean power by 2030, and retrofit millions of homes.

“These policies could save a typical household up to £1,400, generating savings not just for one year, but for every year to come.”